SALE OF LLC INTEREST AGREEMENT
If you are selling your interest in an LLC company, it is important that you use a sale of LLC interest agreement to layout the specifics of the sale. Doing so will help prevent any misunderstandings at a later date. The agreement listed below is free of charge for you or your company to use.
This Agreement is entered this the __________ day of __________, 20___, by and between ___________________ (Name), hereinafter referred to as Seller, and ______________________ (Name), hereinafter referred to as Purchaser.
WHEREAS, the parties hereto desire that a __________ percent (_______%) interest in the capital and profits of ________________________________________ (Name of LLC), hereinafter referred to as LLC, be sold to Purchaser pursuant to this Agreement on the date and at the time provided for herein ________________________(the "Effective Date"); and
WHEREAS, the parties hereto desire to set forth certain representations, warranties, and covenants made by each to the other as an inducement to the consummation of the sale and certain additional agreements related to the sale;
NOW, THEREFORE, in consideration of the premises and of the mutual representations, warranties, and covenants herein contained, the parties hereby agree as follows:
1.1 Subject to the terms and conditions set forth herein, the closing of this sale of LLC interest shall be held on __________________, 20_______.
1.2 The Seller shall sell the said LLC interest for a total purchase price of __________________ dollars ($____________), consisting of ___________________ dollars ($____________) in cash plus the assumption of debts worth _______________ dollars ($____________).
Such purchase price represents interest in the following assets of the LLC with such total purchase price to be divided among the assets as follows:
Fixtures and equipment (as set forth in Exhibit A) $__________
Real estate (as set forth in Exhibit B) $__________
Accounts receivable $__________
Cash type assets $__________
Good will $__________
(You must attach lists of the fixtures and equipment and real estate of the LLC on separate sheets to be titled Exhibit A and Exhibit B respectively.)
1.3 The Seller shall tender to Purchaser at the closing a fully executed bill of sale for the interest being transferred.
1.4 The Purchaser shall deliver at the closing its certified or cashier's check in the amount of _________________________ dollars ($_______) as well as its fully executed note for the balance of the purchase price. Such note shall bear interest at a rate of __________ percent (_____%) and shall be payable in equal ______________ (Specify Period, i.e., Monthly) payments _________________ (Plus or Including) interest payable on the ____________ (Day, i.e., Fifteenth) of each ______________ (Term, i.e., Month, Year, etc.) beginning ________________ (Month &Day), _______ (Year).
2.1 Seller represents and warrants to Purchaser that as of the date hereof and on the Effective Date (all representations and warranties being joint and several):
(a) To the best of Sellers knowledge and belief, the LLC has good and marketable title to all properties, assets, and leasehold estates, real and personal, as set forth in the attached Exhibit A, subject to no mortgage, pledge, lien, conditional sales agreement, encumbrance, or charge, except for:
(1) liens reflected on the attached Schedule 1 as securing specified liabilities (with respect to which no default exists)(you should attach a list of liens securing specified liabilities on a separate sheet labeled Schedule 1) ; and
(2) liens for current taxes and assessments which are currently not in default; and
(3) liens arising by operation of law of which, except to the extent disclosed on the attached Schedule 2 (you should attach a list of any liens arising by operation of law on a separate sheet labeled Schedule 2), the Seller has no knowledge of any such liens existing.
(b) The Seller has delivered to Purchaser a list (Schedule 3) (you should attach a list of all the LLCs insurance policies on a separate sheet labeled Schedule 3), complete in all material respects, as of ________________ (Month &Day), _______ (Year), of all insurance policies carried by the LLC. The LLC carries insurance on its properties, assets, and business, which Seller believes to be adequate in character and amount, with reputable insurers and such insurance policies are still in full force and effect.
(c) In all respects material to the business, financial condition, and properties of the LLC on a consolidated basis, the LLC is not in default under any law or regulation, or under any order of any court or federal, state, municipal, or other governmental department, commission, board, bureau, agency, or instrumentality wherever located, and, except to the extent set forth on the attached Schedule 2 there are (1) no claims, actions, suits, or proceedings instituted or filed or, (2) to the knowledge of the Seller there are no claims, actions, suits, or proceedings threatened presently or which in the future may be threatened against or affecting the LLC at law or in equity, or before or by any federal, state, municipal, or other governmental department, commission, board, bureau, agency, or instrumentality wherever located.
3.1 At or before the Closing Date:
(a) The Seller's Members (or Seller and the other Members of the LLC if Seller is not the LLC itself) will cause Seller (or LLC if Seller is not the LLC itself) to:
(1) Carry on its business substantially as it has heretofore and not introduce any materially new method of management, operation or accounting;
(2) Perform all material obligations under agreements which relate to or affect its assets, properties, and rights;
(3) Use its best efforts to maintain and preserve its business organization intact, retain its present employees, and maintain its relationships with suppliers, customers, and others having business relations with them;
(4) Maintain its properties and facilities in as good working order and condition as at present, ordinary wear and tear excepted; and
(5) Keep in full force and effect present insurance policies or other comparable insurance coverage.
(b) The Members will not permit the Seller (or if the LLC itself is not the Seller: The Seller and the other Members of the LLC will not permit the LLC), without the prior written consent of the Purchaser, to:
(1) Enter into any contract or commitment or incur or agree to incur any liability or make any capital expenditures except in the normal course of business;
(2) Create, assume, or permit to exist any mortgage, pledge, or other lien or encumbrance upon any assets or properties whether now owned or hereafter acquired;
(3) Increase the compensation payable or to become payable to any Member, employee, or agent, or make any bonus payment to any such person; or
(4) Sell, assign, lease, or otherwise transfer or dispose of any property or equipment except in the normal course of business.
4.1 The Sellers obligations hereunder are, at its option, subject to the satisfaction of the following condition on or prior to the Effective Date:
(a) If Purchaser is a corporation, the Seller shall have received a copy of the resolutions authorizing the execution, delivery, and performance of this Agreement by Purchaser certified by the Secretary of Purchaser to have been adopted by Purchasers Board of Directors and to be in full force and effect as of the Effective Date.
5.1 If Purchaser is a corporation, Purchaser represents and warrants to Seller as of the date hereof and on the Effective Date, that the execution, delivery, and performance of this Agreement by Purchaser has been duly authorized by Purchasers Board of Directors and that the Agreement constitutes the valid and binding obligation of Purchaser and that a properly certified Board of Directors resolution to this effect will be presented to Seller before the Effective Date.
6.1 The parties hereto shall deliver or cause to be delivered on the Effective Date and at such other times and places as shall be reasonably agreed on, such additional instruments as may reasonably be requested for the purpose of carrying out this Agreement. Seller will cooperate and use its best efforts to have the present Members and employees of Seller (or LLC if the LLC itself is not the Seller) cooperate on and after the Effective Date in furnishing information, evidence, testimony, and other assistance in connection with any actions, proceedings, arrangements, or disputes of any nature with respect to matters pertaining to all periods prior to the Effective Date.
6.2 This Agreement (including the schedules and annexes hereto) and the documents delivered pursuant hereto constitute the entire agreement and understanding between the parties and supersede any prior agreement and/or understanding relating to the subject matter of this Agreement. This Agreement may only be modified or amended by a duly authorized written instrument executed by the parties hereto.
6.3 This Agreement may be executed simultaneously in two or more counterparts. Each counterpart shall be deemed an original, and all of the counterparts together shall constitute but one and the same instrument.
6.4 Any notice or communication required or permitted hereunder shall be sufficiently given if sent by certified or registered mail, postage prepaid, with return receipt requested:
(a) To Purchaser at:
(b) To Seller at:
6.5 All warranties, covenants, representations, and guarantees shall survive the closing and execution of the documents contemplated by this Agreement. In executing and carrying out the provisions of this Agreement, the parties hereto are relying solely on the representations, warranties, and agreements contained in this Agreement or in any writing delivered pursuant to its provisions or at the closing of the transactions herein provided for and not upon any representation, warranty, agreement, promise, or information, written or oral, made by any person other than as specifically set forth herein or therein.
6.6 This Agreement shall be construed in accordance with the laws of the State of ___________________________.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
STATE OF _________________________
County of __________________________
On this __________ day of __________, ___, before me personally appeared ______________________, known to me to be the person described in and who executed the foregoing instrument and acknowledged that he or she executed the same as ____________________s own free act and deed.
__________________________ ______________________ (County)
Notary Public ______________________ (State)
My Commission Expires: __________